CC (AIRPORT) Vs. SHASUN CHEMICALS & DRUGS LTD.

JUDGEMENT

(1.) THIS is an appeal filed by the Commissioner of Customs (Airport), Chennai against the order -in -original No. 8/2001 (Commr. Air), dated 9 -2 -2001 passed by the Commissioner of Customs (Airport), Chennai, on the direction of the Central Board of Excise and Customs vide order No. 233 -R/2001 - F. No. 389/170/2001 -JC(BMB), dated 4 -10 -2000. The facts of the case are that the officers of the Directorate of Revenue Intelligence gathered intelligence that the respondents herein had imported technical know -how in documents from M/s. Nagase and Co., Japan for manufacture of S -Iibuprofen, a pharmaceutical drugs through the baggage of their Company personnel and cleared them without declaring the same to the Custom's authorities and thus evaded payment of duty on the same. The detailed investigation conducted by the DRI revealed that the respondents herein had entered into a collateral agreement with M/s. Nagase of Japan and the latter had agreed to transfer the technical know -how in writing for a monetary consideration and agreed to give exclusive licence pertaining to manufacture of the said drugs by a specific patented chemical resolution methods using PBA which is required by the licensee i.e. the respondents. As per para 2.1, page No. 1 of the Option Agreement dated 21 -5 -1995 entered into between the respondents -importers and the Japan firm viz. M/s. Nagase of Japan, the importers were required to pay a sum of USD 9,00,000/ - (Rs. 2.83 crores) towards the payment of option/licence fee and M/s. Nagase of Japan was to grant an option to enter into the licence agreement. In terms of the agreement the importers had remitted USD 6,00,000/ - on 6 -6 -95 and USD 3,00,000/ - on 4 -8 -95 to M/s. Nagase of Japan for supply of technical information about the manufacture of S -Ibuprofen using M/s. Nagase's proprietary resolving agent SPBA and subsequently the technical information was exchanged.

(2.) STATEMENT was recorded from Sekar, Vice President of the respondents -importers who stated that that the importers had entered into a licence agreement with M/s. Nagase of Japan. He also stated that they have made payment of USD 9,00,000 in two instalments and that payment was made as part of the option fee for the purpose of obtaining basic technical information which is termed as "technical know -how" and he further stated on a query that option fee was paid towards obtaining basic technical information mentioned as technical know -how are essentially the same. He has also stated that they have not declared the payment of technical know -how to the Customs at any point of time.

(3.) STATEMENT was also recorded from Shri Abhaya Kumar, Joint MD of the respondents who also corroborated the statement given by the Shri S.G. Sekar.